4 ms·

That's a good point about the risk of supply fluctuations, but there is no denying it keeps govt's in check by removing the ability to (easily) manipulate curre

by jeromec 17y ago

That's a good point about the risk of supply fluctuations, but there is no denying it keeps govt's in check by removing the ability to (easily) manipulate currency. EDIT: In response to replies the above should read "govt's in check short of using force"

patio11 17y ago
I'm going to go ahead and deny it, actually. North Korea can confiscate value pretty easily regardless of whether they use crispy paper or shiny magic rocks as currency. "Give me all your magic rocks, or I'll send men to beat you." (If that sounds far-fetched, I would note that the United States has banned private possession of gold before.) More subtle variations on this: "We require you to pay us in shiny magic rocks, but we will only pay you in crispy paper.", "Our coins are made out of shiny magic rocks... but, haha, there is less magic in them now! Too bad you're not an alchemist and will never notice!", "These paper entitle you to shiny magic rocks. We're lying, but you don't know that.", etc, etc, etc.
- jeromec 17y ago
  I partially agree; that's why what I meant would be a total metal reliance, e.g. 1oz silver/gold eagles etc. where the amount of gold/silver is guaranteed and consistent. I'm not saying metal's an optimum solution, only pointing out its abilities.
  - sethg 17y ago
    Guaranteed by whom? If in 2009 the government guarantees that its mint's coins will be at least 99% gold, and then in 2010 it guarantees that they will be at least 90% gold, what are you going to do—assay each coin that comes into your hand before you put it in your wallet? (The Israel Museum once had an exhibit on money which included a series of ancient coins, struck from exactly the same mold over a number of years. The oldest one was something like 90% gold and the most recent was something like 1%.)
    - jeromec 17y ago
      The metal is just the tool. Like the Constitution or anything else, it's up to the people to hold the govt. to the standard. Unlike non-backed currency, with metals any shaving of value can be detected obviously (more obviously than taxation via inflation) and quantified.
      - sethg 17y ago
        The only “value” of currency that matters to me is my ability to give it up in exchange for the things that I want and take it in exchange for the things I have. In this sense, if I don’t trust government-provided statistics, all I need to detect changes in the “value” of currency is to keep a budget. If my currency-denominated expenses have gone up and my standard of living has remained constant, that’s an obvious sign of inflation. By contrast, if a supermarket cashier gives me a handful of coins in change and I want to know which are 90% gold, which are 95%, and which are 99%, what am I supposed to do? Carry an analytic balance into the grocery store? That would make me real popular with everyone standing behind me in line....
        jeromec 17y ago
        Will a dime buy you a gallon of gas today, as it would in the early 1900s? It would if it were a silver dime, which is roughly worth $3 now. People don't notice loss of value as easily as when it's obviously measurable, as in loss of metal. The law (hypothetically) would decree coins had that amount of metal, and discrepancies would make the news. I'm not arguing for metal, so much as pointing out its contrast with non-backed currency.
        evgen 17y ago
        A silver Barber dime minted in 1900 was 2.5 grams and 90% silver. That gives you $1.40 as of the close of market today, so you could basically buy half as much gasoline now as you could then.
        17y ago
ntoshev 17y ago
Any commodity approximates currency, but in practice this doesn't keep totalitarian governments in check. The government can take away your house or any possessions you couldn't hide, ban trading of popular commodities (like foreign currencies; this drastically reduces liquidity), or, as a measure of last resort, kill you. Former socialist countries have seen all of these after WWII.
- thaumaturgy 17y ago
  Or, more subtly -- and not requiring any force at all -- a government can simply hoard any commodity or currency through a series of differences in trading other commodities or currencies, artificially inflating the value of the commodity (or currency).
anigbrowl 17y ago
Ahahahaha no. Have no never wondered why standards bodies (which decree official weights and measures) are operated by governments? Many times throughout history, measurements of everything from land area to the standard weight of coins have been adjusted by governments to suit their policies (sometimes in the interests of fairness and trade, sometimes in the interests of refilling the treasury or paying an army). Certainly, one can turn to science and make objective statements about both mass and purity. But unless you have melting facilities and deal in raw metal (rather than stamped coins) there is no advantage in this. As a hypothetical sovereign individual, you'll lose out when trying to trade raw metal because without the word of an independent (and government-licensed) assayer the buyer will discount the value of your lump'o'gold to allow for the possible unreliability of your claims about purity and weight. Most people don't have the facilities to assay precious metals themselves, so they rely on a third party to certify such claims; the implied social contract stamped into a coin or ingot has much greater value than the actual metal itself. Please, look into some history of money. currency abuse is not a recent phenomenon by any means.

by jeromec 17y ago

patio11 17y ago

I'm going to go ahead and deny it, actually. North Korea can confiscate value pretty easily regardless of whether they use crispy paper or shiny magic rocks as currency. "Give me all your magic rocks, or I'll send men to beat you." (If that sounds far-fetched, I would note that the United States has banned private possession of gold before.) More subtle variations on this: "We require you to pay us in shiny magic rocks, but we will only pay you in crispy paper.", "Our coins are made out of shiny magic rocks... but, haha, there is less magic in them now! Too bad you're not an alchemist and will never notice!", "These paper entitle you to shiny magic rocks. We're lying, but you don't know that.", etc, etc, etc.

jeromec 17y ago
I partially agree; that's why what I meant would be a total metal reliance, e.g. 1oz silver/gold eagles etc. where the amount of gold/silver is guaranteed and consistent. I'm not saying metal's an optimum solution, only pointing out its abilities.
- sethg 17y ago
  Guaranteed by whom? If in 2009 the government guarantees that its mint's coins will be at least 99% gold, and then in 2010 it guarantees that they will be at least 90% gold, what are you going to do—assay each coin that comes into your hand before you put it in your wallet? (The Israel Museum once had an exhibit on money which included a series of ancient coins, struck from exactly the same mold over a number of years. The oldest one was something like 90% gold and the most recent was something like 1%.)
  - jeromec 17y ago
    The metal is just the tool. Like the Constitution or anything else, it's up to the people to hold the govt. to the standard. Unlike non-backed currency, with metals any shaving of value can be detected obviously (more obviously than taxation via inflation) and quantified.
    - sethg 17y ago
      The only “value” of currency that matters to me is my ability to give it up in exchange for the things that I want and take it in exchange for the things I have. In this sense, if I don’t trust government-provided statistics, all I need to detect changes in the “value” of currency is to keep a budget. If my currency-denominated expenses have gone up and my standard of living has remained constant, that’s an obvious sign of inflation. By contrast, if a supermarket cashier gives me a handful of coins in change and I want to know which are 90% gold, which are 95%, and which are 99%, what am I supposed to do? Carry an analytic balance into the grocery store? That would make me real popular with everyone standing behind me in line....
      - jeromec 17y ago
        Will a dime buy you a gallon of gas today, as it would in the early 1900s? It would if it were a silver dime, which is roughly worth $3 now. People don't notice loss of value as easily as when it's obviously measurable, as in loss of metal. The law (hypothetically) would decree coins had that amount of metal, and discrepancies would make the news. I'm not arguing for metal, so much as pointing out its contrast with non-backed currency.
        evgen 17y ago
        A silver Barber dime minted in 1900 was 2.5 grams and 90% silver. That gives you $1.40 as of the close of market today, so you could basically buy half as much gasoline now as you could then.
        17y ago

ntoshev 17y ago

Any commodity approximates currency, but in practice this doesn't keep totalitarian governments in check. The government can take away your house or any possessions you couldn't hide, ban trading of popular commodities (like foreign currencies; this drastically reduces liquidity), or, as a measure of last resort, kill you. Former socialist countries have seen all of these after WWII.

thaumaturgy 17y ago
Or, more subtly -- and not requiring any force at all -- a government can simply hoard any commodity or currency through a series of differences in trading other commodities or currencies, artificially inflating the value of the commodity (or currency).

anigbrowl 17y ago

Ahahahaha no. Have no never wondered why standards bodies (which decree official weights and measures) are operated by governments? Many times throughout history, measurements of everything from land area to the standard weight of coins have been adjusted by governments to suit their policies (sometimes in the interests of fairness and trade, sometimes in the interests of refilling the treasury or paying an army). Certainly, one can turn to science and make objective statements about both mass and purity. But unless you have melting facilities and deal in raw metal (rather than stamped coins) there is no advantage in this. As a hypothetical sovereign individual, you'll lose out when trying to trade raw metal because without the word of an independent (and government-licensed) assayer the buyer will discount the value of your lump'o'gold to allow for the possible unreliability of your claims about purity and weight. Most people don't have the facilities to assay precious metals themselves, so they rely on a third party to certify such claims; the implied social contract stamped into a coin or ingot has much greater value than the actual metal itself. Please, look into some history of money. currency abuse is not a recent phenomenon by any means.